Building a new business can be a daunting challenge, especially in the early months when getting to grips with a host of new and unfamiliar business management tasks is vital
What are the critical elements of business management that small business owners need to know, understand and ensure are done?
Many people go into self-employment and set up their own business because they have passion, skills, knowledge and expertise in the product or service that they offer. This core aspect of the business can take a lot of time and effort to deliver. On top of this, small business owners must also wear many other hats including CEO, finance, marketing, sales, IT and often many more!
This may mean being involved in many areas in which you have little or no experience, so you may have to learn new skills, which can take even more time and can sometimes prove challenging.
We recently caught up with Nadia Ashraf from specialist business and finance consultancy company, Mastermind Business Academy, to help demystify the basic elements that every new business owner needs to know.
Here are her 5 top tips!
Even as a small business you’ll need a solid grasp of the financial fundamentals if you’re going to manage your business effectively. From bookkeeping, cashflow and forecasting to budgeting, accounting and taxes – being in control of your finances is key to success.
Small businesses need to be able to keep accurate and up-to-date financial records hence the need to understand and complete your bookkeeping. Equally important is ensuring you have a focus on managing budgets, creating financial projections and understanding accountancy and tax matters so that you can make the right decisions for your business.
There are plenty of easy-to-use accounting software packages, which are readily available online, that can help reduce the workload and take the complexity out of managing your finances. Or you may choose to outsource some or all of the elements to a qualified professional.
Planning is an essential element of any successful business. No matter how big or small your business is, having a clear idea of where you want it to go and what you want to achieve is crucial. After all, if you don’t know where you need to get to, how will you get there?
Admittedly when you’re first starting out or if your product or service isn’t too complex then you won’t need anything too onerous, perhaps even just a one- or two-page document will suffice but it should cover the basics (executive summary, SMART goals and objectives, target market and competition, marketing plans, resource requirements, budget) and should be updated at least annually or perhaps more frequently if your business or the environment or sector in which you operate is rapidly changing.
For example, the COVID-19 pandemic required many businesses to rapidly rethink their operations, objectives and opportunities. Proactive business planning will provide the framework for you to navigate and be better prepared for short, medium- or long-term adjustments.
Effective selling is the lifeblood of any business, after all without customers where will your business be?
Turning prospects into customers or even being able to sell yourself, your brand and your business to gain funding, investment and/or partnership opportunities will be critical to helping your business grow and thrive.
The ability to build relationships and persuade customers to make purchases is what selling is all about – and although it may sound simple, it can be quite uncomfortable if it’s not something you’ve done much of before. From understanding what the buyer wants, to using psychology to engage the buyer, there are a wonderful variety of tried and tested techniques to selling.
The strategy behind your selling techniques will be led by your marketing plan and your business offering. It may make sense to lead with a solution selling approach when showcasing your product for example or you may want to demonstrate your business’s positive financial forecasts and accurate consumer research when pitching to a potential investor or partner.
Business owners are faced with a plethora of decisions in and around their business on a daily basis, in fact even on a minute-by-minute basis – from resource requirements to product range, investment, expenditure and more – and all can have a crucial impact on the success of the business.
Being in control of what’s going on with the business, whether it be internal or external, and having a solid grasp of how resources are being utilised will help to build your self-confidence and make you a more productive decision maker.
Project Management is all about putting the right people in the right places, utilising the right resources at the right time and having a solid grasp of timelines and deadlines to ensure it all comes together when you need it to – all part of any recipe for success.
Being aware of where you actually are as a business will help you better identify the areas in which you are strong and the areas which need strengthening. You may need to add to your team in terms of qualified personnel, you may need to outsource some of the more technical or creative aspects of the business, you may want to add strength to your team in terms of numbers to push sales or deal with enquiries.
Understanding what you have available versus the project's needs, will allow you to establish where you need to upskill yourself or your team and where you need to adapt and change tactics to lead to a successful outcome.
The practical skills needed to successfully lead and manage a business can undoubtedly benefit from tried and tested tools and techniques. Regardless of business size or sector, a consistent approach with a tailored plan will go a long way in producing positive results. Many of the concepts and fundamentals of business management remain the same for most businesses. Understanding how to best utilise and apply these principles to your own business is key.
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Mastermind Business Academy comprises of qualified and experienced leadership, management and finance professionals with 20 + years of experience. The specialist consultancy provides business and finance training to individuals and businesses through bespoke masterclasses and workshops.